Ayer v. Western Union Telegraph Co.
10 A. 495, 79 Me. 493, 1887 Me. LEXIS 105 (1887)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Telegraph companies, as quasi-public servants, cannot contractually limit their liability for negligence in message transmission through stipulations requiring message repetition; moreover, as between the sender and an innocent receiver, the sender who chooses the telegraph as the means of communication bears the loss caused by transmission errors that lead to contract formation.
Facts:
- The plaintiff, a lumber dealer in Bangor, delivered a message to the defendant, Western Union Telegraph Company, to be sent to his correspondent in Philadelphia.
- The original message offered to sell 800,000 laths at "$2.10 net cash" for July shipment.
- Western Union transmitted and delivered the message to the Philadelphia correspondent, but negligently omitted the word "ten," making the offer read "$2.00 net cash."
- The Philadelphia correspondent immediately accepted the offer as received, for "$2.00 net cash."
- After the error was discovered through subsequent correspondence, the plaintiff shipped the laths at the lower price of $2.00 per M because his correspondent insisted on that price.
- The plaintiff had prepaid the regular tariff rate for the message, and the message blank contained a stipulation limiting the company's liability for unrepeated messages to the amount paid.
Procedural Posture:
- A dispute arose between the plaintiff and defendant regarding an erroneously transmitted telegraph message.
- The case was reported to the Supreme Judicial Court of Maine for a determination of legal questions arising from these facts.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a telegraph company's printed stipulation limiting liability for unrepeated messages shield it from responsibility for its own negligence, and as between the sender and an innocent receiver, who bears the loss when a contract is formed based on a telegraph company's erroneous transmission of an offer?
Opinions:
Majority - Emery, J.
No, a telegraph company cannot limit its liability for negligence through a stipulation for unrepeated messages, and as between the sender and an innocent receiver, the sender bears the loss from an erroneously transmitted contractual offer. The court reasoned that telegraph companies are quasi-public servants, granted valuable franchises and owing the public a duty of care and diligence. Allowing them to stipulate against liability for their own negligence would be against public policy, similar to common carriers, because their business is vital to the public good and individuals are dependent on their proper performance. Companies voluntarily engage in the business, control their operations, and can charge in advance, thus they should perform their duty of care without qualification (citing True v. Tel. Co., 60 Maine, 1 and Bartlett v. Tel. Co., 62 Maine, 221). Regarding the allocation of loss between the sender and receiver, the court adopted the rule that the party who selects the telegraph as the means of communication (the sender) should bear the loss caused by transmission errors. This is deemed the "safer and more equitable rule" because the sender has the initial choice of communication method, while the receiver must rely on the message as received. To hold otherwise would seriously hamper business transactions. This rule presupposes the receiver's innocence and that they had no reason to suspect an error in the message (citing Durkee v. Vt. C. R. R. Co., 29 Vt. 137; Saveland v. Green, 40 Wis. 431; Morgan v. People, 59 Ill. 58; and Tel. Co. v. Schotter, 71 Ga. 760). The court concluded that the plaintiff was bound by the $2.00 price and was entitled to recover the difference from the telegraph company.
Analysis:
This case significantly shaped the legal landscape for liability of public service corporations and contract formation in the age of rapid communication. It established a strong public policy against exculpatory clauses for negligent performance by entities granted public franchises. Furthermore, by placing the risk of transmission errors on the sender, the decision provided a clear rule for allocating loss in contract disputes arising from telegraphic mistakes, reinforcing the principle of objective assent in contract law, where the apparent agreement governs. This precedent would influence future cases involving errors in electronic communications and the enforceability of boilerplate contractual limitations.
